Documents indicate Zion First National Bank provided four term loans—adding another later—and a revolving loan to the company in 2014. The latter was due in July 2016, and the financial firm declined to extend the terms.
By 2017, cost-cutting measures were underway, and a restructuring officer was appointed by the bank to step into the supervisory role historically performed by majority stock owner David Howell. Zion’s appointee was terminated last week, a day before the Chapter 11 paperwork was filed, and court documents allege the person’s lack of knowledge in the industry resulted in significant damage to the companies.
Bank officials didn’t respond to a request for comment, although one of its attorneys, according to the newspaper, stated in court documents, “The principal of the debtor, David Howell, used unauthorized force to displace a pre-petition chief restructuring officer from the principal place of business for this debtor’s business enterprise in Lewiston.” The statement also calls into question his authority to do so in Nevada.
Totals weren’t available, but the paperwork indicates there’s currently an, “… outstanding balance owed by the borrowers in the approximate amount of $16.7 million.” The company’s latest round of layoffs came early this year, preceded by another last year.
Freedom Munitions is well-known in competitive shooting circles, particularly 3-Gun, where it was a regular sponsor of national events. A factory tour of the company’s plants in Lewiston, Idaho, five years ago, indicated the facilities working at near capacity, and staff members emphasized additional shifts were being added to fill orders.
Companies, big and small, often thrive after emerging from Chapter 11 Bankruptcy protection, with consumers suffering no noticeable disruption in supply or service during the interim.